Tag Archives: 360-degree view

De-Siloing Data for P&C Insurers

Big data stands to transform the insurance industry in unprecedented ways, providing insights into customer behavior and risk that are unmatched in the history of the industry. Yet property and casualty insurers have significant hurdles to overcome before they can leverage big data and its associated analytical tools to its fullest extent.

P&C insurers struggle to use the data they gather because many organizations are still siloed, meaning that information is stored in separate databases that don’t communicate between offices, buildings or departments. About 80% of the average P&C company’s data is dark data, or data that is difficult or impossible to find when needed, MarkLogic’s  Derek Laufenberg  writes.

How can insurance companies bring their dark data into the light? Here are some pathways to integration:

Evaluate Your Assets

There is a great amount of untapped potential in the company data that decision makers are unable to access. The best way to begin leveraging this data is to inventory data sources, TechRepublic writer Mary Shacklett explains. When a P&C insurer’s data sources are accounted for, it’s easier to plan a process for effectively integrating those sources and improving access to them.

After discovering the company’s existing data sources, consider how this data is currently used and shared. Do staff use cloud-based spreadsheets to share and compare data? Do they rely on email and regularly scheduled meetings?

“The centuries-old insurance industry seems to still be heavily drowning in paperwork and redundant manual procedures,”  Kevin Doubleday writes in Insurance Thought Leadership.

Evaluating data storage, accessing and sharing procedures help illuminate the most effective places to start the integration process.

See also: Cognitive Computing: Taming Big Data  

Put the Company in the Customer’s Shoes

Data management strategies influence customer satisfaction, loyalty and willingness to recommend a company more than most executives think, Corrie Mieszczak at Evergage says. Mieszczak recommends approaching de-siloing with the goal of developing “a 360-degree view of each customer.”

As property and casualty insurance becomes more customer-focused and retention-sensitive, the need to understand customers becomes more urgent. To learn what customers want, P&C insurers need to track the right data and leverage it to meet that customer’s needs when they occur, John Mayo adds at PropertyCasualty360.

Once data sources are accounted for — and leaders understand how they’re currently used and shared — its easier to understand how those sources relate to the customer experience.

“Corporate silos are customer experience killers because customers don’t care about how your company is organized,” Forbes’ Dan Gingiss says. Instead, pinpointing the end of the customer experience enables P&C insurers to spot places where integration will be most effective.

By integrating data and employing tools like artificial intelligence and machine learning, forward-thinking insurance companies are creating a competitive advantage for themselves, says Dario Debarbieri at IBM Watson. Debarbieri suggests that the customer experience can be optimized through seamless collaboration across marketing, commerce and supply chain channels.

Insurance companies that incorporate the customer’s perspective into their approach to de-siloing improve their chances of becoming future-ready. As outlined in an MIT Sloan Management Review study co-written by Peter Weill and Stephanie L. Woerner, “Future-ready enterprises are able to innovate to engage and satisfy customers while at the same time reducing costs.”

These organizations give customers a good experience while at the same time treating their data as an accessible strategic asset.

Determine What De-Siloing Can Do for You

Risk is one of the top concerns for P&C insurers facing integration. If the data set is hacked, for example, InfoSum and DataSift founder Nick Halstead says that connecting all of the organization’s data into a single pool potentially puts more information at risk.

Yet merging silos can also play a key role in improving overall enterprise risk management, Risk Management Monitor’s Thomas Abelmann adds. By integrating data and planning across the organization, P&C insurers become more effective at creating, implementing and evaluating competitive strategies — and staying ahead of risks.

“In the past 30 years, we’ve made enormous strides in creating technological tools that help de-silo data and information so they can be better shared and used across organizations,” Bluescape CTO Demian Entrekin says. “But silos still exist in most complex organizations, particularly when it comes to nonlinear areas like strategy.”

Better integration can also help insurance companies fight fraud, according to Ethics and Insurance blog founder Duncan Minty. Analytical software, including programs that use artificial intelligence (AI), can improve fraud detection, but only if the algorithms are trained on a sufficient data set — a set that can be much more difficult to obtain when data is siloed.

Finally, de-siloing can improve efficiency and productivity, two essential steps for an insurance industry struggling with a concurrent drop in auto insurance premiums and a rise in catastrophic property claims.

“When your company’s data lives in separate, non-communicating systems, you’re hampering your company’s ability to get the most out of that information,” says April Rassa, marketing and growth director at Progressly. “You’re also creating extra work for employees, because when it comes time to actually put the data to use, the only way to share knowledge with other departments is via manual, inefficient methods such as spreadsheets, email or chat.”

Joe McKendrick at Informatica says that de-siloing offers the opportunity to solve one of the largest problems facing insurance companies and other industries today: a surfeit of data with very little insight. Integration, McKendrick adds, helps organizations understand customers, competitors and risks.

See also: Insurtech’s Act 2: About to Start  

Don’t Cut Corners

Many insurtech companies and other organizations offer myriad shortcuts for integrating data, but many of these shortcuts don’t provide the commitment or stability needed for long-term success. “The popular cloud-based analytics services — IBM’s Watson, Salesforce’s Einstein, et al — offer easy-to-use and economical options for bringing analytics functionality in house, but this isn’t a very good idea,” says Scott Robinson, Lucina Health director of business intelligence.

Instead, Robinson advocates for an approach that treats analytics as a new way to look at the insurance business — both its internal processes and its treatment of customers. By encouraging departments and teams to bake in the use of analytics, and by offering a comprehensive software platform that allows each group to focus on its area of expertise, insurers stand to create more lasting, effective change.

Yet P&C insurers must take care not to let a goal of comprehensive, stable change turn into a quest for unattainable perfection, Datameer’s John Morrell says. “Creating the perfect data architecture and data delivery processes is, in practical terms, unachievable.”

Instead, P&C carriers can focus on taking the process one step at a time, enabling more access to data by beginning with the departments, offices or teams who can best improve customer service with better access.

By evaluating the availability of data sets — and their role in the customer experience — P&C insurance companies are better-positioned to choose the solutions that benefit their operations most.

“Digital transformation requires breaking down the classic silos of front, middle and back offices to transform each into a unified, seamless customer experience,” says business transformation and automation leader Vartul Mittal.

To succeed at this task, P&C insurers must do more than simply create an app or improve their website. They’ll need to focus on “contextual data and a middle office that can move from explaining the past to predicting the future” by leveraging machine learning, sophisticated algorithms and access to big data.

Digital Transformation in Billing

The word “digital” is most commonly associated with front-office transformation – client-facing activities, often in the service of acquiring business. This is for good reason, of course. Driven by their experience in other industries such as retail and banking, customers are demanding digital capabilities from their insurers, as well. Customers – individuals and companies both – expect that everything from access to information, to the ability to bind a policy, to initiating and managing a claim, to paying the bill should be easy to do and available digitally. Our consumer and SMB research reinforces this, indicating that net promoter scores (NPS) can swing 60-70 points when the entire journey is easy.

With that in mind, I’m continuing on my promised theme of looking at all of the steps in the value chain to explore digital transformation across the customer journey. This month, I’ll take a look at billing and payments, an area that, at first glance, might not be an obvious choice for digital reinvention. But it is a great way to engage with customers, optimize a process that is often manual and present additional selling opportunities, as well.

Not coincidentally, we also have a recently published thought leadership paper, The New (Digital) Face of Billing: Defining Multi-Line Insurance Billing Excellence, that takes a deeper look into digital billing.

Thinking Beyond Transactions

In my previous posts, I have talked about the need for a service mentality instead of the siloed, transaction-focused approach insurers have traditionally taken since the automation of business processes 50-plus years ago. To drive value from digital investments, insurers need to expand their thinking beyond transaction processing. Any interaction should be taken as an opportunity to develop and enhance the relationship with the customer, not as simply a means to an end.

In other words, billing is not just about getting the premium paid, although that must be done efficiently and effectively. Billing is one of the rare opportunities insurers have to interact with their customers in a relatively benign situation (as opposed to the stressful, often contentious interactions associated with claims), and it must be embraced as such.

See also: 4 Rules for Digital Transformation  

This does not just mean cross- and up-sell, although that can be an element. Customers will be wary of this, particularly if done in a clunky way, particularly when offering a product that does not match the customer’s unique needs. The overall approach must expand from a basic indemnity mentality to one of service – and the billing approach must evolve beyond simply accepting a customer’s premium. It’s important to keep in mind that the customer engagement mentality is needed across all customer types – from individuals, to businesses, to agents, to third parties and other partners.

The Customer Journey

Digital transformation must always begin with mapping the customer journey. Identifying key touchpoints and “moments of truth” in billing is the first step to mapping interactions and defining the required capabilities. Journey mapping allows you to consider how to roll out capabilities incrementally, giving you the chance to experiment with different services for unique groups and to quickly see what works and what does not.

Understanding your customers and their needs is key. Not every customer will benefit from an in-depth engagement at the time of billing. Some customers may be only interested in a hands-off billing experience, with, for example, a credit card being charged automatically on a monthly basis. Building an automated, paperless process for these customers is likely the right approach, while spending time and effort on building a deeper relationship may not result in a strong ROI. But even these customers can benefit from clear, natural-language explanations of such things as changes in their premium or renewal options.

Other customers may benefit from a deeper interaction. The moment of truth for these users can be providing opportunities for them to lower their premium through product bundling or identification of local risk factors that they may be able to address. Although lowering premium payment may seem at first glance to be a negative, the improvement in customer engagement and satisfaction – with associated Net Promoter Score (NPS) – will more than pay for the difference.

Still others may be interested in an interactive experience that doesn’t require them to speak with a human. AI and chatbots are becoming increasingly sophisticated in providing a human-like experience in a mobile setting, which can be a powerful way to prevent relatively costly calls into the call center as well as provide an engaging way to interact with customers.

But only by taking the time to understand your customers through journey mapping will you be able to make the right investment decisions. And don’t just rely on your own experience – you need an outside-in perspective to do it right.

End-to-End Journey

The customer journey for billing does not end at billing. Billing is an enterprise process – it touches on many different parts of the business. For the advanced capabilities I’m highlighting to work, it may require a wider transformation to take place first. A 360-degree view of the customer – all of the policies, correspondences, claims, etc. – is needed to offer bundling options. Customer analytics will provide cross-sell options. Core system replacement may be needed to offer paperless processing. These are just a few examples.

This is another reason why mapping the customer journey is key – it allows you to see where the process breakdowns and bottlenecks exist that need to be addressed to create an engaging customer experience.

Our research shows that all generations (including the younger “digital natives”) use a variety of touchpoints for questions and service requests when it comes to billing. This is important to map in your customer journeys and important to build into your operating model – the people, processes and technology around billing that make it work. People may still want to pick up the phone and ask why their premium went up (our studies show at least 30% of calls are billing-related). But by providing clear information to customers around the billing process you can prevent a certain amount of those calls from coming through in the first place.

Do It Right

Billing is an opportunity to engage customers, but an occasional one at best. It is of primary importance to know how customers want to be billed and how they want to pay (electronically, with a paper check, via bank transfer, etc.) and how they will want to interact if they have a question or concern (self-service, call center, etc.). But the most fundamental need is to make sure the bills themselves are accurate. Cross-sell or risk management exposed through the billing process will not have much effect if the client is double-billed or if the payment was not correctly recorded. As Novarica sums up succinctly in a recent report The New Normal for P/C Insurers: 100 Data, Digital, and Core Capabilities, “errors can be costly.” And those errors are not only costly in the sense of having more people call into your call center, but also making it far less likely that those customers will become advocates.

See also: 5 Cs of Transformation in Insurance  

Mind the Gap

In our thought leadership from earlier this year, Insurance in the Digital Age: Transforming from the Outside In, we mentioned the growing gap between customer expectation for digital services and the ability of insurers to provide them. Billing is a moment of truth for customers and a real engagement opportunity for insurers. While this makes it an excellent place to get started with your overall digital transformation, it is important to remember that you need to look at the end-to-end process as billing flows through many systems and data stores. This should not dissuade you from tackling billing, but don’t be surprised if there are some basic things that need to be done with the underlying technology (including considering retirement of old, inflexible core billing systems) and processes.

It may seem intimidating, but the benefits in terms of longer-term cost savings, efficiency and customer engagement will be worth the effort … while bringing billing into the digital age.